data centerIHS Technology has issued a bullish SDN and NFV revenue forecast. According to the forecast, the global market for Software-Defined Networking (SDN) and Network Functions Virtualization (NFV) among service providers will soar from $289 million in 2015 to $8.7 billion in 2020. That’s a 98% CAGR.

Driving the strong SDN and NFV revenue forecast will be network operators’ and enterprise-scale businesses’ undertaking of a wholesale transformation of digital network architecture and systems, according to the IHS analysis.

Carriers are progressing from defining the vision, goals and SDN and NFV-based architectures to carrying out proof-of-concept projects, field trials and commercial deployments, IHS Technology Senior Research Director and Advisor, Carrier Networks’ Michael Howard writes in an analysis and commentary based on the market research provider’s latest ¨Carrier SDN Hardware, Software, and Services Annual Market Report.¨ It’s a transition that will take 10 to 15 years for service providers to complete, IHS said.

SDN, NFV Revenue Forecast
The trend is global in scope and scale, with network carriers in North America and Europe forecast to account for 13% of total SDN revenue from 2015-2020, according to IHS. In addition:

  • SDN and NFV represent the shift from a hardware focus to software one: Software and outsourced services will comprise 46 percent of SDN revenue in 2020;
  • SDN orchestration and controller software revenue is forecast to grow to over $1.8 billion in 2020;
  • But by 2020, there will be more value in SDN apps than in orchestration and control, which will be priced reasonably due to competitive pressure

News that CenturyLink was employing SDN and NFV to build an integrated customer self-service marketplace for applications and on-demand services emerged last October.

CenturyLink’s NFV platform was up and running in 36 network and data center locations in seven countries at the time. Going forward, management said it intended to virtualize 40 percent of its global IP core network locations – eight more locations – by the end of the year. Plans are to achieve full global virtualization of its entire global IP core and data centers by 2018.

Instituting industry and market-wide standards are considered keys to accelerating market development and growth. In May the Open Networking User Group (ONUG) launched four industry initiatives aimed at fostering adoption of open SDN architectural frameworks.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!